Paid Parental Leave scheme for employers

What is the Paid Parental Leave scheme?

The Paid Parental Leave scheme is a new entitlement for working parents of children born or adopted from 1 January 2011.

Eligible working parents can get 18 weeks of government funded Parental Leave Pay at the rate of the National Minimum Wage (currently $589.40 a week before tax).

Full-time, part-time, casual, seasonal, contract and self-employed workers may be eligible.

What are the benefits of the Paid Parental Leave scheme?

The Paid Parental Leave scheme is designed to:

• provide financial support during the time parents take off work, in the vital early months, to care for their newborn or recently adopted child
• enhance child and maternal health and development
• encourage womens workforce participation, and
• promote gender equity and work/family balance.

The Paid Parental Leave scheme will help employers:

• retain valuable and skilled staff by encouraging them to stay connected with the workforce when they become parents
• enhance existing family friendly workplace conditions without having to fund Parental Leave Pay themselves, and
• in the long-term through the increased workforce participation of parents.

What is my role in providing Parental Leave Pay?

You must provide Parental Leave Pay to an eligible employee who:

• has a child born or adopted from 1 July 2011
• has worked for you for at least 12 months prior to the expected date of birth or adoption
• will be your employee for their Paid Parental Leave period
• is an Australian-based employee, and
• is expected to receive at least eight weeks of Parental Leave Pay.

If your employee does not meet the above criteria, you are not required to provide Parental Leave Pay. However, if you both agree you can still choose to provide it to your employee. You need to register for Centrelink Business Online Services and then opt-in to provide Parental Leave Pay before your employee lodges their claim for the scheme.

Your business must have an Australia Business Number to participate in the scheme.

Centrelink will contact you if you are required to provide Parental Leave Pay to an employee.

The Family Assistance Office will provide Parental Leave Pay to an eligible parent who does not receive it from their employer.

What are my responsibilities as an employer when I provide Parental Leave Pay?

When you accept the decision that you are required to provide Parental Leave Pay to your employee, you must provide your bank account details and your employee’s pay cycle and pay cut-off details to Centrelink. This will ensure you can receive Paid Parental Leave funds on time. There are a number of other things you are required to do:

• provide Parental Leave Pay to your employee for their Paid Parental Leave period
• provide Parental Leave Pay to your employee in accordance with their normal pay cycle
• withhold tax from the Parental Leave Pay under the usual PAYG withholding arrangements
• provide your employee with a record of their Parental Leave Pay – usually a pay slip – within one working day of your employee receiving their pay
• include Parental Leave Pay in the total amounts on your employee’s annual or part-year payment summary (statements produced and given to your employee for tax purposes)
• keep written financial records of Paid Parental Leave funds received from Centrelink and of the Parental Leave Pay provided to your employee
• notify Centrelink:
  • if and when your employee returns to work before or during their Paid Parental Leave period
  • if and when your employee is no longer your employee, if this occurs before the end of their Paid Parental Leave period
  • if you change your bank account details or your employee’s pay cycle details, and
  • if you receive an incorrect amount of Paid Parental Leave funds from Centrelink, or if you are unable to provide Parental Leave Pay to your employee.
• return any unpaid Paid Parental Leave funds to Centrelink, and
• notify Centrelink, in advance if possible if you are ceasing to trade, selling your business, transferring ownership or merging with another business.

Register for Centrelink Business Online Services—it will save time

To make sure your business is ready to provide Parental Leave Pay to your eligible employees, you can pre-register for the scheme, or you can register when Centrelink contacts you through Centrelink Business Online Services

If you do not have access to the internet, you can register for the scheme by calling the Centrelink Business Hotline on 13 11 58.

You will be contacted if you are required to provide Parental Leave Pay to an eligible employee. You will be asked to provide Centrelink with your:

• business name
• Australian Business Number
• contact details
• business bank account details, and
• employee’s pay cycle details.

Registering for an AUSkey

If you have an AUSkey or current Australian Taxation Office (ATO) digital certificate, you will be able to register with Centrelink Business Online Services immediately. If you do not hold an AUSkey or ATO digital certificate, you can still register for Centrelink Business Online Services but will not be able to add or update your bank details or add new users online. If you choose not to register for an AUSkey, you can contact the Centrelink Business Hotline on 13 1158 who will carry out these functions for you. To find out more information about AUSkey, visit www.auskey.abr.gov.au